April 2, 2022

Here’s why Starlink is becoming one of the world’s most valuable companies

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Written by: Lucien Paulemil

Starlink is a satellite internet constellation owned and operated by Elon Musk’s space exploration and technology company SpaceX. Starlink’s stated mission is to bring the internet to “areas where connectivity has been unreliable or completely unavailable“.

So far, Starlink appears to be delivering on this promise. In February 2022, Elon Musk tweeted that Starlink now has “over 250,000 user terminals” worldwide.

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If Musk delivers on his plan of bringing internet service to every remote region of the globe, Starlink could become one of the world’s most valuable space technology companies.

In which countries is Starlink available?

Starlink is a global network with operations in 31 countries.

At present, the company has clients in the United States, Canada, the United Kingdom, France, Germany, Austria, the Netherlands, Belgium, Switzerland, Ireland, Denmark, Portugal, Australia, and New Zealand. Furthermore, Starlink is expected to become available in Italy, Spain, Poland, and Chile in the coming months.

Furthermore, Elon Musk is seemingly committed to fast-tracking the availability of Starlink to customers who have an urgent need for internet service. Earlier this month, he announced that Starlink satellites were placed over Ukraine, providing internet connectivity to the inhabitants of the war-torn nation.

How much does the service cost?

When it launched, Starlink’s standard internet package was priced at $99 per month. This is only the subscription cost, and clients also needed to pay $499 for the mountable satellite dish that needs to be installed manually. However, those prices were increased to $110 and $599 respectively in March 2022.

However, this package doesn’t deliver the best internet connection offered by Starlink’s satellite capacities. Thus, earlier this year, Starlink unveiled a premium package priced at $500 per month, plus an initial payment of $2,500 for the hardware.

Is Starlink profitable?

Forbes recently calculated that if every client is using the standard package priced at $110 per month, Starlink is generating at least $300 million of yearly revenue. However, this number is probably higher, given that Musk stated there are more than 250,000 terminals and that some of those users could have already subscribed to the premium plan.

That said, it’s important to remember that Starlink’s operations are still in their infancy. What’s more, they are very capital intensive.

Indeed, Forbes also calculated that “the hard cost of a Starlink launch are in the neighbourhood of $15 million, meaning that launch cost alone per satellite is about $300,000, assuming 50 satellites per launch. That puts the hard cost of launching the existing Starlink constellation at $600 million”.

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Starlink has already launched 2,000 satellites in orbit – and
plans to launch thousands more in the coming years.

Finally, it’s worth mentioning that Starlink has numerous other costs to bear, including ground stations, R&D to improve the technology, and satellite losses. For example, Starlink recently lost 40 satellites to a geomagnetic storm.

Given that Starlink plans to launch 30,000 satellites, the total cost could rise to more than $30 billion.

What is Starlink’s valuation?

Starlink is one of the world’s most exciting space technology companies.

As such, it is richly valued.

In December 2021, Morgan Stanley claimed that Starlink will turn cash flow positive in 2031 – pushing SpaceX’s valuation to nearly $100 billion. In fact, Morgan Stanley believes SpaceX has a bull-case valuation of $200 billion – double its present valuation – driven by the exceptional growth of both SpaceX and Starlink.

Thus, Starlink’s standalone valuation is difficult to pinpoint, but it is growing every day at breakneck speed.

To stay up to date with Starlink/SpaceX investor news, visit ipowise.net

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